The Political Economy of the Metro Bailout

Funding for Washington’s Metro commuter rail system is shaping up as a bruiser of a fight in the 2018 General Assembly session.

Metro’s management says it needs at least $500 million yearly in government support — $150 million from Virginia — to meet pressing maintenance needs. Without the money, Metro will continue its slow-motion death spiral of cycle of deteriorating safety, schedule delays, eroding ridership, and declining fare revenue. Without the money, Metro’s General Manager has said he will need to cut service in July 1 this year.

While Northern Virginia legislators are eager to patch up the ailing transit provider, which moves hundreds of thousands of commuters, downstate lawmakers won’t be happy about any solution that reduces funding for downstate projects. And Republicans won’t like any remedy that perpetuates the status quo of a broken, dysfunctional rail system hampered by a featherbedding union contract.

In his proposed biennial budget for FY 2019-2020, Governor Terry McAuliffe asked for $150 million in dedicated funding for Metro; $84 million would come from Northern Virginia regional transportation funds, while $65 million would come from new taxes on real estate sales, hotel stays, and wholesale gasoline. Providing the money would be contingent upon Maryland and Washington, D.C., funding their share, and a streamlining of Metro’s governing board from 16 members to five.

“The Metro system is a lifeline for the Northern Virginia economy, and it remains critical to our economic competitiveness,” McAuliffe said. “But we all know that system is just plain broken. And it represents a significant threat to our economy if we don’t fix it, and quickly.”

Notably absent from McAuliffe’s list of requirements is any reform of the Metro’s labor contract. That shouldn’t come as a surprise given the Democratic Party’s pro-union orientation generally and its close ties to the Amalgamated Transit Union (ATU) in particular.

According to the Virginia Public Access Project, the Alexandria office of the ATU has donated $75,300 to Virginia political campaigns since 2007 — all but $2,000 to Democratic campaigns and funds. The Maryland office of the ATU has donated $44,000, all to Democrats. And Local 689 representing Metro transit workers, has donated $132,269 — all but $250 to Democrats. From all sources, the union contributed $30,000 to the Northam for Governor campaign.

Republicans won’t be happy about funneling $150 million a year more into an organization unwilling to extract concessions from a labor union that in turn funnels money into Democratic Party coffers. Crass political considerations aside, the GOP also has to be concerned that the alliance between Democrats and labor unions is the essence of the Blue State governance model that cements Democratic Party primacy in states like Illinois and New Jersey while pushing them to the brink of fiscal insolvency.

McAuliffe is shrewd enough not to ask downstate Virginians to share the hefty burden of supporting Metro. Virginia’s dispensation of mass transit funds already favors Northern Virginia by lopsided margins. If Metro has problems, that’s because short-term political considerations over the decades have driven Metro to its perilous predicament. Motivated by social justice concerns, the board has refused to raise fares sufficient to meet the organization’s needs. It has allowed the maintenance backlog to build to billions of dollars, and unfunded employee pension obligations to accumulate billions more. All the while, the board has assented to labor contracts that have crimped productivity and inflated costs. Downstate Virginians would be infuriated by any proposal requiring them to help pay the bill for such a dereliction of management.

The question is how Northern Virginia legislators will receive McAuliffe’s proposal. Only a fraction of Northern Virginia commuters ride Metro rail and buses — most commute by car. Tens of thousands of motorists who use the Dulles Toll Road pay additional tolls to help fund construction of the Silver Line to Washington Dulles International Airport — indeed, they pay more to subsidize the Silver Line than Silver Line passengers pay in fares.

McAuliffe shrewdly rejected the option of a new regional sales tax, a move that surely would have infuriated non-Metro-riding voters. His ploy is a classic one of imposing a series of opaque indirect taxes — levies on real estate transactions, hotel stays, and whole gasoline — that voters will not readily connect with the Metro. But dipping into Northern Virginia’s regional transportation fund will deny money for other projects. Metro could yet trigger an electoral revolt. But most of NoVa’s legislators are Democrats now, they are philosophically inclined to support mass transit, and they are likely to fall in line behind a Democratic governor.

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7 responses to “The Political Economy of the Metro Bailout

  1. We’re still doing a double standard in my view. Contrast the focus on METRO – fully justified but how about VDOT and congestion levels in METRO Washington.

    Can you , should you , throw similar accusations at them for the “horrendous amount of money they have spent and still are spending and we still have congestion and functionally obsolete bridges and stuff – and even accidents that are attributable to lapses of judgement in design.. operations, maintenance, etc?

    How much money SHOULD IT COST to run a safe and effective METRO?

    How do we know we are spending near enough to get that result?

    Similarly you could ask VDOT why they don’t have enough money to provide a better functioning transportation grid in NoVA…

    I’m not excusing METRO – but I doubt seriously we even know how much it SHOULD cost to run METRO… and our complaints seem to be that it’s costing a lot more than we thought it would or should..

    How do we do a FAIR and OBJECTIVE evaluation of METRO ?

    I think you could easily find equally bad and ugly aspects of VDOT ‘s very costly expenditures for NoVa Roads and we STILL GET THIS:

    Worst Traffic Spot in US Found on I-95 in Northern Virginia

    and WORSE – even this!

    Five plead guilty to VDOT snow removal bribes worth $10.3M

    http://www.insidenova.com/news/crime_police/five-plead-guilty-to-vdot-snow-removal-bribes-worth-m/article_6f643a76-caf9-11e7-b594-9bb4db08baad.html

    • Look, Larry, when the McDonnell administration was throwing money at road and highway mega-projects, I called them out on it. As I recall, you were just fine with the criticism. Now I’m calling out Metro for being the managerial black hole it is, and you suddenly have cold feet.

  2. “Adams also pleaded guilty to possession with intent to distribute cocaine after law enforcement recovered approximately 129 grams of cocaine and related drug paraphernalia at Adams’ residence during the execution of a search warrant. Stueve said Adams also admitted to previously distributing cocaine to others, including several of his colleagues at VDOT, and to obtaining cocaine from a relative of one of his VDOT co-workers.”

    So, the relative of a VDOT employee gets cocaine to a VDOT supervisor who then deals the coke to various people including other VDOT employees. Apparently the cash required to finance the coke ring came from bribes solicited and provided by snow removal contractors.

    Gosh, I wonder why people have lost faith in the Imperial Clown Show in Richmond and all the little clowns they manage.

    I ran three or four different internet searches looking for any member of Virginia’s General Assembly making any public comment on the combined bribery / drug dealing happening right under their noses at VDOT.

    For any Virginia politicians who may read this, here is a possible sound bite:

    “I am shocked and disappointed to read about the convictions of two VDOT supervisors for bribery. The fact that there are allegations of cocaine distribution involving VDOT employees and relatives of VDOT employees only serves to make this incident a worse indictment of VDOT’s operations. I am calling for a full scale review and audit of the processes and controls used by VDOT to prevent this kind of malfeasance. I have to wonder whether this is an isolated incident or emblematic of a broader problem within VDOT.”

  3. From the 1987 John Sayles movie “Matewan.”

    The Prince of Darkness is upon the land. Now in the Bible his name is Beelzebub, Lord
    of the Flies. Right now on Earth today his name is Bolshevist! Socialist! Communist!
    Union man! Lord of untruth, sower of evil seed, enemy of all that is good and pure and
    this creature walks among us. (Union man.) What are we going to do about it?”

  4. Dear Peter,

    I read a view of what really happened because I liked John Sayles’ _Matewan_, only to find out that Sheriff Sid Hatfield was a scoundrel. There were other inaccuracies, too, as I remember. But as art, and propaganda, it is quite good!

    Sincerely,

    Andrew

  5. Dear Jim,

    I ride the “rough beast” everyday and am glad it is there. Though you are doubtless right that it has been very poorly run. I sure hope it does not collapse, but if it does, we’ll have to work around that collapse. I ain’t goin’ anywhere! ;-))< Well, at least voluntarily or for extraordinary reasons.

    Sincerely,

    Andrew

  6. It’s a lost cause. Look at the characteristics of the fundamental technology, steel wheels on steel rails. That paradigm requires ginormous capital / fixed-cost outlays to be built. So to make sense to run it, it means you have to have more than ginormous volumes.

    Metro’s been around for what now? 40 years? As we’ve seen, it’s best of days, it was near where near covering half of it’s costs. And now it’s gotten so bad, that’s it’s sucking money from other projects for itself. Even then it’s still profusely bleeding! It’s time to put that dinosaur out to pasture.

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